Central bank liquidating assests

But decreasing interest rates can fuel inflation, so the Fed must be careful.

Lower rates increase the money supply, which in turn boosts economic activity.Central banks are inherently non-market-based or even anticompetitive institutions.Although some are nationalized, many central banks are not government agencies, and so are often touted as being politically independent.The global financial system was also thrown into turmoil by the insolvency of a number of major banks and financial institutions throughout the United States and Europe, exemplified by the collapse of Lehman Brothers in September 2008.In response, in December 2008, the Federal Open Market Committee (FOMC), the Federal Reserve's monetary policy body, turned to two main types of unconventional monetary policy tools: (1) forward policy guidance and (2) large-scale asset purchases, aka quantitative easing (QE).

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